US Warns of Enhanced Scrutiny on Transactions with Antigua and Barbuda Amid Weakening Anti-Money Laundering Laws
Warning Issued by US Treasury Department
The US Treasury Department has issued a warning to American banks and financial institutions to exercise heightened vigilance when processing transactions involving the Caribbean nation of Antigua and Barbuda. The advisory, released by the Financial Crimes Enforcement Network (FinCEN), is in response to significant changes made by the government of Antigua and Barbuda that have eroded its anti-money laundering laws and oversight of offshore banks.
Background on Concerns about Antigua and Barbuda’s Offshore Financial Sector
Regulators and law enforcement officials have long expressed concerns about the operation of Antigua and Barbuda’s offshore financial sector, citing lax supervision, strict bank secrecy, and inadequate international cooperation. The recent amendments to the country’s Money Laundering (Prevention) Act in November 1998 have further exacerbated these issues, weakening investigations and hindering international cooperation.
Key Concerns Highlighted by US Treasury Advisory
- Strengthened Bank Secrecy: Amendments to the Money Laundering (Prevention) Act have made it more difficult for authorities to gather information about suspicious transactions.
- Conflict of Interest in International Financial Sector Authority: The new authority has a board comprising representatives from offshore banks, creating a conflict of interest and violating international banking principles.
- Undermined International Cooperation: The government’s actions have hindered investigations into money laundering cases.
Importance of Enhanced Scrutiny on Transactions
The US Treasury advisory emphasizes the importance of increased scrutiny on financial transactions involving Antigua and Barbuda to prevent the illicit flow of funds. Financial institutions are urged to exercise caution when processing transactions from or to this jurisdiction, and to report any suspicious activity to relevant authorities.
Recommendations for US Financial Institutions
- Apply enhanced scrutiny to all transactions involving Antigua and Barbuda
- Exercise caution when processing transactions from or to this jurisdiction
- Report any suspicious activity to relevant authorities
By following these guidelines, financial institutions can help prevent the laundering of illicit funds and support efforts to combat international money laundering.